Undisputed Employer-Employee Relationship Must For Proceedings Under Contract Labour (Regulation & Abolition) Act, 1970: Bombay High Court Set Asides Industrial Court Order

The Bombay High Court single bench of Justice Amit Borkar held that for the proceedings under the provisions of Contract Labour (Regulation & Abolition) Act, 1970, the relationship between employer-employee should be undisputed. The court held that in absence of such a relationship, the labour court or the industrial court doesn't have any jurisdiction to deal with the matter falling under the provisions of Contract Labour (Regulation & Abolition) Act, 1970.

Brief Facts:

The Petitioner made an application to delete Petitioner's name from cause title of the proceedings under Contract Labour (Regulation & Abolition) Act before the Industrial Court. The Industrial Court rejected the Petitioner's application to delete Petitioner's name on the ground of absence of employee-employer relationship between the Respondent No. 1 and the Petitioner.

The Petitioner argued that for proceedings under the Contract Labour (Regulation & Abolition) Act to be viable, an unequivocal employer-employee relationship must be present. Referring to the paragraph No.6(d) of the Complaint, it argued that the allegations therein indicated the relationship to be disputed making the complaint unsustainable. Despite the Industrial Court acknowledging the absence of an employer-employee relationship between the Petitioner and Respondent No.1, the Petitioner argued that it declined the Petitioner's request.

In response, the Respondent No.1 contended that the evidence on record established an indisputable employer-employee relationship. It argued that the submission made in paragraph No.6(d) did not conclusively negate such a relationship and, thus, were insufficient to warrant a finding of absence of employer-employee ties. Consequently, it argued that the Industrial Court's decision to reject the Petitioner's application, stating that the Petitioner was a necessary party, was appropriate.

Observations by the High Court:

The High Court referred to the decision of Supreme Court in Cipla, Ltd Vs. Maharashtra General Kamgar Union reported in (2001) 2 L.L.N. 19 and underscored the pivotal role of an undisputed employer-employee relationship in invoking the jurisdiction of labor courts or industrial adjudicating authorities. It held that unless such a relationship is firmly established, inquiries into unfair labor practices cannot be initiated under the Contract Labour (Regulation & Abolition) Act.

The High Court referred to the paragraph 6(d) of the complaint and noted that the Petitioner himself contested the validity of the contractual relationship between the principal employer and the contractor, labeling it as sham or bogus. Consequently, the High Court held that the Industrial Court's determination of the absence of an employer-employee relationship between the Petitioner and the Respondent No. 1 was appropriate.

The High Court held that the jurisdiction of the Industrial Court to entertain complaints is under Contract Labour (Regulation & Abolition) Act is contingent upon the existence of an indisputable or undisputed employer-employee relationship. In the absence of such a relationship, the High Court held that the Industrial Court's rejection of the Petitioner's application to be removed from the complaint array was unwarranted.

Consequently, the High Court quashed and set aside the order issued by the Member of the Industrial Court, Kolhapur.

Case Title: Indus Towers Limited vs Rajendra Patil (Yedravkar) and